F&P set to close NZ factory

Southern-founded Fisher & Paykel Appliances is set to quit its New Zealand manufacturing operations, but its Dunedin design and engineering base of 135 staff will not be affected.

In a shock to the markets yesterday, Chinese-owned F&P Appliances yesterday briefed staff on plans for closure of its East Tamaki factory, which employs 186 staff doing a four-day week, manufacturing a range of small refrigeration products.

F&P was contacted and asked about any ramifications for the Dunedin-city based design and engineering teams.

F&P chief executive Stuart Broadhurst responded that the decision related only to the East Tamaki factory, with ‘‘no implications for our business in Dunedin''.

‘‘We have worked to continue to grow our strengths in whiteware innovation and design.

‘‘New Zealand is home to our global design centres, and over recent years we've recruited more than 100 engineers, designers and technicians to boost new product development,'' Mr Broadhurst said.

In September last year, F&P Appliances management told the ODT it had a five-year plan to increase staff numbers in Dunedin by at least 50 people, by 2018.

The New Zealand company had its origins in Fisher and Paykel Industries, founded in 1934, and took over Dunedin oven manufacturer HE Shacklock in 1955.

In announcing the East Tamaki situation, Mr Broadhurst said until now the factory's staff had ‘‘staved off the inevitable'' and the closure had nothing to do with their performance.

‘‘However, the harsh reality is this factory is no longer sustainable due to the lack of scale and cost-competitiveness the facility and its products face in today's global whiteware marketplace,'' he said.

He said staff and the union had been kept up to date through numerous consultations since early 2007, when this outcome was first indicated.

Fisher & Paykel would continue to produce specialist componentry and production equipment in New Zealand, but upgraded models of some refrigeration products would be manufactured in its plants in Thailand or in the wider group in China.

A two-stage approach to closure was being considered. Phased closures were likely in July and November, followed by factory decommissioning.

Chinese whiteware and appliances manufacturing giant Haier, with then annual revenues of more than $US23billion, rescued F&P Appliances in 2009 when it acquired a 20% stake.

By November 2012 it initiated a 100% takeover, valued at about $740million, and then delisted F&P Appliances from the NZX.

In 2008, Fisher & Paykel closed its more than 20-year-old Mosgiel plant with the loss of 430 jobs and put the 16.5ha Mosgiel site on the market, sending its manufacturing facilities offshore.

Dunedin operations then moved to part of the Dunedin City Council-owned Wall Street mall in George St, with a design and engineering team emphasis and call centre.

In the two and a-half years before the Mosgiel plant closure, East Tamaki lost 450 jobs to offshore manufacturing bases.